Wall Street mixed, Treasury yields rise after data deluge

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NEW YORK — Wall Street wavered on Friday and Treasury yields advanced as investors digested a flurry of economic data ahead of the long Christmas holiday weekend, capping a week fraught with concerns over the Fed’s restrictive monetary policy and related recession fears.

All three major U.S. stock indexes were mixed, showing little conviction in the wake of Thursday’s sharp sell-off as a raft of indicators pointed to economic softening, evidence that the Federal Reserve barrage of interest rate hikes were having their intended effect.

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“Everyone’s waiting for 2023 to have a fresh take again,” said Paul Kim, chief executive of Simplify ETFs in New York.

For the week, the S&P 500 and the Nasdaq remain on course for their third straight Friday-to-Friday losses.

As the remaining trading days in 2022 tick away, all three indexes appear set to close the books on their steepest annual percentage plunges since 2008, the darkest year of the global financial crisis.

“This was the year where diversification failed and everything sold off together; a max pain year, where both bonds and equities sold off,” Kim added. “There was nowhere to hide.”

A slew of data from the Commerce Department and the University of Michigan showed that while inflation appears to be cooling, so is consumer spending, which accounts for about 70% of the U.S. economy.

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On the other hand, new home sales posted a surprise gain and consumer sentiment brightened.

But the data did little to move the needle regarding Fed policy expectations.

“Inflation looks fairly sticky and interest rates keep mounting up,” Kim said. “And the punchline is (interest) rates will have to be higher for longer.”

The Dow Jones Industrial Average rose 117.74 points, or 0.36%, to 33,145.23; the S&P 500 gained 14.1 points, or 0.37%, to 3,836.49; and the Nasdaq Composite dropped 0.73 points, or 0.01%, to 10,475.39.

European shares followed their U.S. counterparts down and up, and eventually ended the session nominally higher as economic jitters wrestled with strength in healthcare and banking stocks.

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The pan-European STOXX 600 index rose 0.04% and MSCI’s gauge of stocks across the globe gained 0.06%.

Emerging market stocks lost 1.03%. MSCI’s broadest index of Asia-Pacific shares outside Japan closed 1.14% lower, while Japan’s Nikkei lost 1.03%.

Treasury yields resumed their upward trajectory after data showed personal income rising more than expected and October inflation data was upwardly revised.

Benchmark 10-year notes last fell 22/32 in price to yield 3.7509%, from 3.671% late on Thursday.

The 30-year bond last fell 61/32 in price to yield 3.8269%, from 3.724% late on Thursday.

The dollar fluctuated but remained largely unchanged against a basket of world currencies after two days of gains as market participants weighed the probability of interest rates rising further and staying there longer than many might have hoped.

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The dollar index fell 0.06%, with the euro up 0.2% at $1.0614.

The Japanese yen weakened 0.42% versus the greenback at 132.92 per dollar, while Sterling was last trading at $1.2032, down 0.09% on the day.

Oil prices jumped after Moscow announced it might cut crude output in response to the G7 price cap on Russian exports.

U.S. crude rose 2.67% to settle at $79.56 per barrel, while Brent settled at $83.92 per barrel, up 3.63% on the day.

Gold edged higher ahead of the long weekend, as investors digested U.S. economic data.

Spot gold added 0.2% to $1,796.90 an ounce.

(Reporting by Stephen Culp in New York; Additional reporting by by Huw Jones in London; Editing by Edwina Gibbs, Matthew Lewis and Jonathan Oatis)